Pancho Villa for Economics Minister in Argentina?

Louis Proyect lnp3 at panix.com
Thu Dec 27 07:46:51 MST 2001


John Reed, "Insurgent Mexico":

[Pancho] Villa proclaimed himself military governor of the State of 
Chihuahua, and began the extraordinary experiment -extraordinary 
because he knew nothing about it-of creating a government for 300,000 
people out of his head.

It has often been said that Villa succeeded because he had educated 
advisers. As a matter of fact, he was almost alone. What advisers he 
had spent most of their time answering his eager questions and doing 
what he told them. I used sometimes to go to the Governor's palace 
early in the morning and wait for him in the Governor's chamber. 
About eight o'clock Sylvestre Terrazzas, the Secretary of State, 
Sebastian Vargas, the State Treasurer, and Manuel Chao, then 
Interventor, would arrive, very bustling and busy, with huge piles of 
reports, suggestions and decrees which they had drawn up. Villa 
himself came in about eight-thirty, threw himself into a chair, and 
made them read out loud to him. Every minute he would interject a 
remark, correction or suggestion. Occasionally he waved his finger 
back and forward and said: "No sirve." When they were all through he 
began rapidly and without a halt to outline the policy of the State 
of Chihuahua, legislative, financial, judicial, and even educational. 
When he came to a place that bothered him, he said: "How do they do 
that?" And then, after it was carefully explained to him: "Why?' Most 
of the acts and usages of government seemed to him extraordinarily 
unnecessary and snarled up. For example, his advisers proposed to 
finance the Revolution by issuing State bonds bearing 30 or 40 
percent interest. He said, "I can understand why the State should pay 
something to people for the rent of their money, but how is it just 
to pay the whole sum back to them three or four times over?" He 
couldn't see why rich men should be granted huge tracts of land and 
poor men should not. The whole complex structure of civilization was 
new to him. You had to be a philosopher to explain anything to Villa; 
and his advisers were only practical men.

There was the financial question. It came to Villa in this way. He 
noticed, all of a sudden, that there was no money in circulation. The 
farmers who produced meat and vegetables refused to come into the 
city markets any more because no one had any money to buy from them. 
The truth was that those possessing silver or Mexican bank notes 
buried them in the ground. Chihuahua not being a manufacturing 
center, and the few factories there having closed .down, there was 
nothing which could be exchanged for food. So, like a blight, the 
paralysis of the production of food began all at once and actual 
starvation stared at the town populations. I remember hearing vaguely 
of several highly elaborate plans for the relief of this condition 
put forward by Villa's advisers. He himself said: "Why, if all they 
need is money, let's print some." So they inked up the printing press 
in the basement of the Governor's palace and ran off two million 
pesos on strong paper, stamped with the signatures of government 
officials, and with Villa's name printed across the middle in large 
letters. The counterfeit money, which afterward flooded El Paso, was 
distinguished from the original by the fact that the names of the 
officials were signed instead of stamped.

This first issue of currency was guaranteed by absolutely nothing but 
the name of Francisco Villa. It was issued chiefly to revive the 
petty internal commerce of the State so that the poor people could 
get food. And yet almost immediately it was bought by the banks of El 
Paso at 18 to 19 cents on the dollar because Villa guaranteed it.
Of course he knew nothing of the accepted ways of getting his money 
into circulation. He began to pay the army with it. On Christmas Day 
he called the poor people of Chihuahua together and gave them $15 
apiece outright. Then he issued a short decree, ordering the 
acceptance of his money at par throughout the State. The succeeding 
Saturday the marketplaces of Chihuahua and the other nearby towns 
swarmed with farmers and with buyers.

Villa issued another proclamation, fixing the price of beef at seven 
cents a pound, milk at five cents a quart, and bread at four cents a 
loaf. There was no famine in Chihuahua. But the big merchants, who 
had timidly reopened their stores for the first time since his entry 
into Chihuahua, placarded their goods with two sets of price 
marks-one for Mexican silver money and bank bills, and the other for 
"Villa money." He stopped that by another decree, ordering sixty 
days' imprisonment for anybody who discriminated against his 
currency.

But still the silver and bank bills refused to come out of the 
ground, and these Villa needed to buy arms and supplies for his army. 
So he simply proclaimed to the people that after the tenth of 
February Mexican silver and bank bills would be regarded as 
counterfeit, and that before that time they could be exchanged for 
his own money at par in the State Treasury. But the large sums of the 
rich still eluded him. Most of the financiers declared that it was 
all a bluff, and held on. But lo! on the morning of February tenth, a 
decree was pasted up on the walls all over Chihuahua City, announcing 
that from that time on all Mexican silver and bank notes were 
counterfeit and could not be exchanged for Villa money in the 
Treasury, and anyone attempting to pass them was liable to sixty days 
in the penitentiary. A great howl went up, not only from the 
capitalists, but from the shrewd misers of distant villages.
About two weeks after the issue of this decree, I was taking lunch 
with Villa in the house which he had confiscated from Manuel Gomeros 
and used as his official residence. A delegation of three peons in 
sandals arrived from a village in the Tarahumare to protest against 
the Counterfeit Decree.

"But, mi General," said the spokesman, "we did not hear of the decree 
until today. We have been using bank bills and silver in our village. 
We had not seen your money, and we did not know...."

"You have a good deal of money?" interrupted Villa suddenly.

"Yes, mi General."

"Three or four or five thousand, perhaps?"

"More than that, mi General."

"Senores," Villa squinted at them ferociously, "samples of my money 
reached your village within twenty-four hours after it was issued. 
You decided that my government would not last. You dug holes under 
your fireplaces and put the silver and bank notes there. You knew of 
my first proclamation a day after it was posted up in the streets of 
Chihuahua, and you ignored it. The Counterfeit Decree you also knew 
as soon as it was issued. You thought there was always time to change 
if it became necessary. And then you got frightened, and you three, 
who have more money than anyone else in the village, got on your 
mules and rode down here. Senores, your money is counterfeit. You are 
poor men!"

"Valgame Dios!" cried the oldest of the three, sweating profusely.
"But we are ruined, mi General!-I swear to you-We did not know-We 
would have accepted-There is no food in the village—"

The General in Chief meditated for a moment. "I will give you one 
more chance," he said, "not for you, but for the poor people of your 
village who can buy nothing. Next Wednesday at noon bring all your 
money, every cent of it, to the Treasury, and I will see what can be 
done."

To the perspiring financiers who waited hat in hand out in the hall, 
the news spread by word of mouth; and Wednesday at high noon one 
could not pass the Treasury door for the eager mob gathered there.


-- 
Louis Proyect, lnp3 at panix.com on 12/27/2001

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